"With President Obama's plan to tax the rich to pay for health care facing deep skepticism on Capitol Hill, key lawmakers are pressing a different way to raise money: taxing the health benefits workers receive from their employers.

"Since companies began offering group health insurance on a large scale during World War II, the value of that benefit has never been counted as income, reducing workers' taxable earnings by an average of $9,000 a year for family coverage.

"In recent weeks, however, Sen. Max Baucus (D-Mont.), chairman of the tax-writing Finance Committee, has repeatedly advocated changing tax laws to include employer benefits, arguing that it makes sense to fund the health-care changes by sucking cash out of the existing system. Meanwhile, 13 other senators -- from both sides of the aisle -- have signed on to a plan for universal coverage that includes a tax on employer-provided benefits."

The Tax Foundation has its own expert on the intersection of health care and tax policies: Robert Carroll, Vice President for Economic Policy and former Deputy Assistant Secretary for Tax Analysis at the Treasury Department under the Bush Administration. Last fall, he authored a report on a proposal to replace the tax exclusion for employer-based health coverage with a health insurance tax credit: Tax Foundation Fiscal Fact No. 144. He also penned an op-ed in the Wall Street Journal last October summarizing the issue.

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